The theoretical tools are designed to help in understanding the mechanics that

The theoretical tools are designed to help in

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theoretical and empirical tools. The theoretical tools are designed to help in understanding the mechanics that are involved in the decision making in economics. They include graphical and mathematical tools. Empirical tools, on the other hand, helps in answering all the questions that might be raised by the theoretical tools. Empirical tools involve the utilization of data and the necessary statistical methodologies to measure the impact that the government policies have on the markets (Gruber, 2016). Establishing a causal relationship between the policy and the outcome of interest is also very important. It is also imperative to have some concepts on government debts and deficits. Government debt is the amount of money it owes others while the deficit is the amount by which the annual spending exceeds total revenue collected. Budget deficits are as a result of the disputes between conservatives who are against raising the taxes and liberals who are against cutting the government programs. Finally, I still need to understand how governments use public finance (taxes in particularly) to handle pollution.
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PUBLIC FINANCE 3 Reference Gruber, J. (2016). Public Finance and Public Policy. New York: Worth Publishers.
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